UPDATE 1-Turkey importing crude from N.Iraq in road tankers

BOLU, Turkey, July 13 (Reuters) - Turkey has begun importing
5 to 10 road tankers of crude from northern Iraq daily and the
volume could rise to 100-200 tankers per day, Turkish Energy
Minister Taner Yildiz said on Friday.

Iraq's autonomous Kurdistan region, which borders Turkey, is
locked in a dispute with the central Iraqi government over oil
exports and energy policy has become a sensitive topic.

A Kurdistan regional government source said earlier this
week that it had sent a small amount of oil to Turkey by trucks
in exchange for diesel, adding it needed the refined product to
run power stations.

"Crude purchases from northern Iraq have begun with a volume
of 5-10 road tankers. This may rise to 100-200 tankers a day,"
Yildiz told reporters at a ground-breaking ceremony for a power
plant in western Turkey.

Ankara has increasingly courted Iraqi Kurds as its relations
with the Shi'ite-led central government in Baghdad have soured.
Turkey is a major investment and trading partner for Iraq,
especially for Kurdistan.

The Kurdish government source said this week Kurdistan was
not getting enough of the refined product under supplies
controlled by the central Iraqi government, making the trade
with Turkey necessary to fill the gap.

Kurdish Prime Minister Nechirvan Barzani has said that if
the central Iraqi government did not provide Kurdistan with its
share of refined products, the region would be forced to act.

According to the Kurdistan government, Iraq has cut supplies
of products to Kurdistan to 16,826 barrels per day (bpd) from
32,116 bpd from April 25, far below its 140,000 bpd allocation.

Kurdistan infuriated Baghdad last year by signing production
sharing contracts with U.S. group Exxon Mobil. A
provincial governor said earlier this month he would also like
to enter talks with Exxon, the world's largest publicly traded
energy company.

Separately, Turkey and Kurdistan are also in talks for the
direct sale of natural gas to Turkey.

But in a sign of moves to soothe ties between Ankara and
Baghdad, the two governments have started technical work on
shipping crude oil from Basra in southern Iraq via the
Kirkuk-Ceyhan pipeline to Turkey's Mediterranean coast.
(Reporting by Evrim Ergin; writing by Daren Butler; editing by
Keiron Henderson)